Chronicling 100 Years of the U.S. Economy

October 2020
Volume 100, Number 10

U.S. International Investment Position

Second Quarter 2020

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The U.S. net international investment position—the difference between U.S. residents’ foreign financial assets and liabilities—was −$13.05 trillion at the end of the second quarter of 2020 (chart 1). Assets totaled $28.87 trillion, and liabilities were $41.92 trillion. At the end of the first quarter, the net investment position was −$12.16 trillion.

The U.S. international investment position is a statistical balance sheet that presents the dollar value of U.S. external financial assets and liabilities at a specific point in time. A negative net investment position represents a U.S. net liability to the rest of the world.

The −$882.6 billion change in the net investment position from the first quarter to the second quarter came from net financial transactions of −$77.5 billion and net other changes in position, such as price and exchange rate changes, of −$805.1 billion (table A).

 

 

U.S. assets increased by $1.95 trillion, to a total of $28.87 trillion, at the end of the second quarter, mostly reflecting increases in portfolio investment and direct investment assets that were partly offset by decreases in financial derivatives and other investment assets (chart 2). Portfolio investment assets increased by $1.39 trillion, to $12.39 trillion, and direct investment assets increased by $938.8 billion, to $7.94 trillion, driven mainly by increases in foreign stock prices that raised the value of these assets. Global stock prices recovered from the decreases that occurred in the first quarter at the onset of the COVID-19 pandemic.

Other changes in position drove the overall increase in U.S. assets (table A).

U.S. liabilities increased by $2.83 trillion, to a total of $41.92 trillion, at the end of the second quarter, mostly reflecting increases in portfolio investment and direct investment liabilities that were partly offset by decreases in other investment liabilities and financial derivatives (chart 3). Portfolio investment liabilities increased by $2.10 trillion, to $22.03 trillion, and direct investment liabilities increased by $1.34 trillion, to $10.10 trillion, driven mainly by increases in U.S. stock prices that raised the value of these liabilities.

Other changes in position drove the overall increase in U.S. liabilities (table A).

The U.S. international investment position statistics for the first quarter of 2020 have been updated to incorporate newly available and revised source data (table B).